In today’s challenging economic environment business leaders and owners need to recognise the importance of business continuity planning that accounts for every eventuality. Since so many businesses- particularly in the SMME sector- rely on the skills, knowledge and relationships of a few key employees, insurance cover for the key personnel is a vital ingredient in the continuity planning mix. What is key-man cover? It refers to an insurance policy taken out by an employer on the life of an employee who is a key individual within the organisation. This cover can be taken out on the life of a dynamic employee who is integral to the company’s success, or the entrepreneur whose skills are irreplaceable in their own business. What does it cover? This type of cover provides compensation for financial losses arising from the death or extended incapacity of the insured staff member. It compensates with a fixed monetary sum that can be used to stabilise the business, including the costs incurred in recruiting a suitable replacement and training if required. Why should a key-person be covered? It can be detrimental to a business to lose effective, qualified people. Key-man cover provides an invaluable safety net for the company and is particularly important for owner-managed businesses whose sustainability rests in the hands of one or two individuals. Losing a key individual can: Directly impact the profitability of the company, Lead to difficulty in raising finance, Result in costly recruitment and training of a replacement, Unsettle creditors who may want immediate settlement as a result of the death of the key person, Threaten client relationships How much cover...

There is a way to address this complex product in a simple way. The dread disease product in four key can be summarized : 1 . The event claims 2 . The definition 3 . The design 4. Sickness Incidence Pillar 1 : The event claims It refers broadly to the medical conditions covered by the product , such as heart attacks and cancer . Some products cover a long list of conditions that looked impressive while others have a shorter list, which makes the product appear less comprehensive. But it can be tricky and therefore we have to look at the other three pillars to see a more complete picture. Pillar 2 : The definition It becomes more complex to understand, because dread disease products does not cover every stage or grade of each disease condition. To keep the product more affordable a description is given of each claim event to describe the requirements to enable payments of the claim. Some definitions may be so severe that a claim will only be paid at a very late stage of the disease. Make sure to read and understand the fine print of your cover. Pillar 3 : Design In order to analyse the product properly one should pay close attention to the product’s design. How is the payment of claims structured ? A simple example is as follows : one product may only cover 50 % of a heart attack claim , where a another policy has 100 % coverage for the claim . in the event of...